Auditing the rapport in your analyst relationships

Analyst Relationship Audit (ARA) is a measurement for the progress of analyst relations programs. First developed in 2001, it involves a series of confidential interviews with analysts following a company’s peer group in order to determine the current level of relationships with the key analyst houses. The diagram here shows an example from an audit we carried a few years ago.

An important part of this audit is discovering how far the tonality of analysts’ comments are positive or negative towards the firm. However, the audit is also a great opportunity to discusser the real rapport between the AR team and the firm: and that’s somthing which can move independently of the analysts’ view of the firm as a whole.

We use a four-level maturity model to classify each house and produce a report summarising recommendations for improving communication between key analysts and the vendor.

Awareness: This level of relationship indicates that, as a group, analysts at that firm have a general awareness about the vendor, its strategy and goals.

Belief: This level of relationship indicates that, as a group, analysts at that firm have enough familiarity to fill a schematic or quantitative model with information about the vendor.

Conviction: This level of relationship indicates that, as a group, analysts at that firm have come to realise the current and future value in the vendor to the extent that they consider it a potentially suitable choice for one of their customers.

Adoption: This level of relationship indicates that, as a group, analysts at that firm have been engaged in an ongoing discussion with the vendor about its benefits, costs and view of the market dynamics.